PROMESA and the Education of Congress

Posted July 3, 2016

By Guest Contributor Howard Hills*

In 1812 the territory of Louisiana was admitted as the 18th state of the union even though war with Britain raged, the local languages were French and Spanish not English, and the region had no developed economy. In 1817 the territory of Mississippi became the 20th state only after Congress and the federal courts intervened in a mass regional land scandal revealing corruption so pervasive it threatened Mississippi’s political and economic viability.

In 1916 the U.S. Congress denied American citizenship to people under U.S. rule in the Philippines and declared that island territory would become an independent nation. In 1986 the U.S. ended American rule in U.N. trusteeship territories in the Pacific and granted sovereign nationhood to Palau, Micronesia and the Marshall Islands.

These past territorial status outcomes demonstrate the imperfect but consistent anti-colonial tradition in U.S. territorial policy.

Just as Mississippi’s catastrophic regional land title fraud scandal is now a historical footnote, the debate in Congress over the federal debt recovery law known by the acronym PROMESA will not loom large in Puerto Rico’s history. The new law’s provisions establishing a federal oversight board to create fiscal order is being labeled “colonialism” by some, but in the larger sweep of history the debt recovery program is an anti-colonial measure to restore stable local self-government that will lead Puerto Rico to either statehood or nationhood.

The current provisional federal takeover of local public finances so the territorial government can be restored to solvency is historic only because its passage re-educated Congress that it alone has the ultimate constitutional power and responsibility for how Puerto Rico is governed. That lesson goes back to the first territorial law of 1789, the Northwest Ordinance, reminding Washington territory status is constitutionally temporary, and statehood or nationhood are the only permanent constitutionally defined status options.

History also will note that 2016 was the year three U.S. Supreme Court rulings confirmed Puerto Rico remains an annexed federal territorial reservation where citizenship rights are defined by federal territorial law not the U.S. Constitution. That means 3.5 million U.S. citizens in Puerto Rico will never achieve equal rights of national and state citizenship unless and until Puerto Rico becomes the 51st state.

Taken together the same three rulings by our nation’s highest court also confirm Puerto Rico will not have irrevocable rights of sovereign nationhood unless and until Puerto Rico ceases to be a U.S. territory. Of course, as the Philippines and other Pacific island territories learned, sovereign nationhood comes without U.S. citizenship.

Congress and Puerto Rico pretended the debate over the debt recovery law was not about the political status of the island. However, the legislation seized Congress with a new understanding that indefinite continuation of territorial status does not serve the long-term best interests of the U.S. or Puerto Rico.

In the historical context of three Supreme Court rulings that ended ambiguity about the legal nature of the current economically stifling political status, passage of the PROMESA law ends decades of institutionalized Congressional indifference toward Puerto Rico. The legislative record created by the PROMESA debate powerfully demonstrates the disciplines and accountability that comes with statehood or nationhood alone will end the current failed client regime syndrome.

An 1810 Supreme Court ruling defined the path forward to a fully democratic status and rule of law for the territory of Mississippi. Now the U.S. Supreme Court has clarified that the Commonwealth of Puerto Rico’s local constitution adopted in 1952 did not create a zone of local sovereignty beyond the reach of Congress.

These rulings reaffirmed that Puerto Rico is “unincorporated” federal property, meaning the 3.5 million U.S. citizens residing under the U.S. flag that has flown over the islands for 118 years are not currently empowered by citizenship rights of an “incorporated” territory in which the U.S. Constitution applies. That separation of U.S. citizenship from the Constitution will exist unless and until the more perfect union 50 states enjoy is formed through admission of Puerto Rico to statehood, or Puerto Rico becomes a nation with is own citizenship and supreme law.

These court rulings confirm the current territorial government in the Commonwealth of Puerto Rico is as much a “junta” created by federal law as the PROMESA control board. As such, enactment of PROMESA dispels the ideological hoax and the political myth that the 1952 constitution exempted Puerto Rico from supremacy of federal law.

That myth of greater local autonomy than territorial status allows made possible the abuse of local autonomy in the credit markets, enabling Wall Street speculators to take higher risk for higher profits. If the PROMESA recovery program works, those who speculated will take losses of profit proportional to the risk they assumed, and that will mitigate the need for a full federal bail out.

Thus, the real promise of PROMESA is that it seeks to wipe out all or most of the island’s unfunded debt burden, clearing the way for Congress to determine the terms for statehood and/or nationhood. The success of PROMESA will leave Puerto Rico ready to follow 32 territories other that became states, or to follow the Philippines and Pacific island trusteeship territories to nationhood.

Only if Congress once again abdicates its constitutional responsibility to resolve the permanent status of the last large and populous U.S. territory will PROMESA become another broken promise of freedom with equal rights and duties of national citizenship in Puerto Rico.

*The author served as lead counsel on territorial status to President Reagan. He is more recently the author of “Citizens Without A State” (Amazon.com), a history of territorial law and policy.